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Sean Mendy, Westbound Equity Partners

By 2018, Sean Mendy had seen enough. The kids and families going through the doors of the Boys & Girls Club in East Palo Alto where he worked were, in his words, “facing more intense versions of the same challenges” year after year. He wanted to do something to address the root of the issue. For all the wealth and opportunity that’s been created in Silicon Valley, very little of it has gone to communities of color.

The result was Westbound Equity Partners Capital, an early stage investment firm with a dual purpose: invest in and build great companies, while addressing the dramatic under allocation of venture capital to founders of color.

We talk to Sean about the route he and his co-founders took to get from that original idea to what today is one of the fastest growing early stage investment firms in the U.S. – built not just to advance a mission, out to win for the long-term with a replicable process and a durable culture.

Sixth Street is proud to be a founding strategic partner to Westbound Equity Partners.

Note: Westbound Equity Partners, formerly known as Concrete Rose Capital.

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Episode Transcript:

DAVID STIEPLEMAN: Hello, and welcome to It's Not Magic, the podcast from Sixth Street about business building that strips away the pretense and gets right to the useful stuff. I'm your host, David Stiepleman. We use this show to talk to founders and industry leaders and get them to explain in plain English what they set out to do, and specifically how they do it.

In this episode, we're speaking with a founder of a fast-growing early-stage investment firm with a dual purpose: invest in and build great companies while addressing the dramatic under allocation of venture capital to founders of color.

SEAN MENDY: I believe that you need more than financial resources to build successful businesses these days. And that social capital is critically important.

DAVID STIEPLEMAN: That's Sean Mendy of Concrete Rose Capital. Sean has had an unconventional route to leading a successful venture firm. For a decade, he led development at the Boys and Girls Club of the Peninsula, which provides opportunities for underserved youth in East Palo Alto. That's the community you hear a lot less about existing in the shadow of the Silicon Valley meccas of tech wealth and their world stride ambitions.

In 2018, Sean had seen enough of the continuing cycle of kids and families going through the doors of the Boys and Girls Club to know that he wanted to do something to address the root of the issue. For all the wealth and opportunity that's been created in Silicon Valley, very little of it has gone to communities of color.

Here's the insane stat - less than 2% of all venture funding goes to people of color and that's today, even after the burst of progress after 2020. We should mention, Sean is a close friend of our firm having known my partner and our CEO Allen Waxman for over a decade through their work at the Boys and Girls Club. And Sixth Street has been a strategic partner to Concrete Rose since those early days when Sean was an entrepreneur in residence here, building his idea into a business.

In this conversation, which took place in early February during Omicron, we talk about the route Sean and his co-founders took to get from that original idea to what today is one of the fastest growing early-stage firms in the Valley built not just to advance a mission, but to win for the long term with a replicable process and a durable culture.

We'll talk about their first unicorn portfolio company, how great businesses are built on doing what you say you'll do, and we'll get into the journey—how it's fun, challenging, rewarding, and a lot of other things, but it's not magic. Let's go.

Sean, it's a great honor to have you here. Are you feeling the pressure of being an early guest because it's a great honor. Is this like kind of a capstone to your career?

SEAN MENDY: I'm feeling a responsibility, but you put me at ease.

DAVID STIEPLEMAN: okay. Well, I'm glad to do it. Let's get right into it. You're nice to be here. You know, we said in the intro, how well things are going for Concrete Rose Capital, and we'll talk about your first fundraise, why you exceeded your targets, the portfolio, it’s super interesting. It's doing well. How you're well, on your way…

SEAN MENDY: Our first unicorn. Our first, you know, seed stage investment, black led company, billion-dollar valuation. It was an exciting week last week to announce that.

DAVID STIEPLEMAN: Very exciting. Asusu run by a great team led by Abby Wamimo. And we we'll talk about that. But before we get there, I want to take you back to the moment where you decided to leave the Boys and Girl Club. You were there running development, Boys and Girls Club of the Peninsula. It was going real well. I mean, you set that organization up with a lot of help and a lot of team members, obviously to succeed on a go forward basis.

And you loved the kids, but you're looking at the kids and you're saying gee, year after year, generation after generation, we’re mitigating or trying to ameliorate the same symptoms of the same problems of the racial wealth gap, of the misallocation of capital, or the unfair allocation of capital. And you decide you're going to go start a firm like Concrete Rose that invests in founders of color. And most people say, great, that's awesome. Let us know. And there was one person who said something a little different. I kind of want to start there.

SEAN MENDY: Yeah. My decision to leave Boys and Girls Club came as a relative, a combination of things. One was yes, I was noticing every year, families were facing more intense versions of the same issues that the previous families that were coming through were facing. And then two, just my experiences as a black man in America and watching where there was, you know, recorded police shooting after a recorded police shooting. And that was just wearing on me. And I, you know, had to decide, do I want to be doing something more to address this? Or what's my reaction going to be to this?

And then three was, you know, this life threatening experience I had where a bone issue went undiagnosed and led to multiple surgeries and a 10-day stay in the ICU, where I came out of that, just kind of asking questions about, you know, what's the broader impact that I want to have with my life, how do I want to spend my time? What am I really here to do?

And then, you know, our mutual friend, Alan Waxman…Wax was somebody who I first I met while I was leading this Boys and Girls Club fundraising campaign. He warned me, he was not looking to get involved in anything and didn't have much time, and then ended up spending a ton of time with me and getting very deeply involved. We started to just have deeper conversations about world issues and life. And I realized we shared the same values. We cared about the same things. He became somebody that I just really trusted. And as I was going through this experience of figuring out well, which problem I wanted to attack and how I wanted to do that, I was just very transparent and honest with him. So, he was the third person I told, outside of my co-founder Jason and the first one who actually knew what he was doing.

DAVID STIEPLEMAN: How did you know that? How did that manifest itself? Like what you were like, oh, there's actual things that you do here to build an investing business?

SEAN MENDY: So I was one, just trying to learn about what he did. And then as I was talking about the things I was noticing, he was asking questions that I didn't have answers to that made me then go back and dig into them more. So, when I talk about the racial wealth gap, I knew the racial wealth gap existed. I actually didn't have the full understanding of why it existed until he started really pushing and asking some questions. That's when I started really dig in and do the research and understand how we got to where we are today.

And then the way that I knew that I wanted to spend more time with him was just the honesty he had when I told him that I wanted to get into the company building and investing side of things, when his reaction was, “this is going to fail. I love the idea, but it is going to fail.” I just loved the transparency and the candor. Listeners can't see the air quotes that I'm going to give, but, you know, it was a “loving” warning or statement, and he wanted to see it succeed. So he encouraged me to pause and be thoughtful.

DAVID STIEPLEMAN: Sean, I want to pick that apart a little bit in terms of the people who reacted, you know, very favorably without necessarily knowing what it was. And I wonder if that's a little bit of a creature of Silicon Valley. You grew up in Silicon Valley, and I've heard you talk about how in the air there, there was this spirit when you were growing up of entrepreneurship and “we can solve big problems” and “we can do anything,” but there's also I think a fair criticism that that method of investing and allocating capital has not helped the racial wealth gap and may have exacerbated it. How do you think about that?

SEAN MENDY: Yeah. So Silicon Valley struggles with the same issues that plague the rest of the country, and it's certainly not exempt. I was pulled over 34 times as a teenager and a young adult. I received two tickets ever and didn't deserve one of them. And, usually what happens? I get pulled over. They'd call my mom and make sure that we own the car and then they let me go. I go to the example of my experience with police to demonstrate the broader issues that are happening across the country that were happening right here in our, in the backyard of the Googles and the Facebooks of the world. I think because of all the exciting things here that are happening, we've been distracted from the local issues that have exacerbated and really metastasized over the past several decades.

DAVID STIEPLEMAN: Can we take an aspect of that VC culture that you're working in -- I mean, you're a VC firm who's allocating capital and trying to do it more intentionally, and you are doing it more intentionally. The cult of the founder, this idea of this typically white guy who is obsessed with their idea, their company is the famous Zuckerberg story where he shows up to some VC pitch in his pajamas, and that's celebrated as kind of quirky and absentminded or whatever that is. Is that okay? Is that you as a founder in Silicon Valley? Is that who you're backing in your portfolio -- they're from different backgrounds? Or is that not a good model?

SEAN MENDY: The model you just described is not a good model. It's definitely not us. We're pretty thoughtful and thorough in how we evaluate opportunities. We want things to be as objective as possible. So, we've created systems that would prevent us from kind of buying into the, just, “there's an enough hype around this, we're going to pour money into it.” Throughout the history of venture there's been very thoughtful people who have been massively successful over the course of several decades and have avoided some of the pitfalls.

DAVID STIEPLEMAN: I want to talk about this sort of intentionality into your process, like how do you do that? What did you go through to build that process? And to enforce that process?

SEAN MENDY: Looking at thousands of deals, studying what's done well, and then creating an actual rubric and process through which we evaluate opportunities - that is not the end all be all. So we’ve got a rubric that was led by two of my partners that identifies the 12 different areas that we're really digging in on with the company. And I think we have 77 subcategories that we're evaluating, and you don't always have answers on all those things, but it forces us to always ask the same questions to compare apples to apples when we're looking at different opportunities.

We know, all right, here's where this company is a 10/10. Here's where it's a 1/10. Here's where we just have no way of knowing the answer and we have to get comfortable with that. We've created this process that is, at first, it was very arduous and now it's become kind of instinctive and very natural for us to go through it. And it's helped us one, as we're making decisions in the moment and then two, to actually go back and look at decisions we made and evaluate whether those were the right decisions.

DAVID STIEPLEMAN: Can you give me an example of, “the founder is just awesome. She's a great presenter. She's clearly very passionate about whatever problem they're solving.” And have you overridden that, have you pulled yourself back from the sort of, instinctive reaction to the founder because of the rubric? What's an example of that?

SEAN MENDY: In situations where there's no path to the business model working or the market being big enough, you just can't talk yourself into that. There's founders who we've loved, we've wanted to work with, who we just hadn't had a way to make it work.

I think it's actually been more the opposite, where it's founders who you meet for the first time and they don't blow you away. And then when you actually dig in on the problem they're trying to solve, the way they're trying to solve it, the actual traction that they have, then you're able to overcome the initial hesitation on the founder, which I think makes total sense, given a founder's job is not to get on Zooms and in 30 minutes captivate you with their personality.

One thing we do evaluate for is storytelling and the person's ability to attract talent and attract resources. But you're not typically doing that in 30 minutes on a Zoom, whether its recruiting a senior executive, you're likely going to get more than one shot to build a relationship with somebody and ideally, you're not meeting somebody and hiring them after one interview, right? So you're spending time with them, you're working with them, you're getting to know them over time. You know with customers, you're actually providing them with an actual solution, as opposed to running them through a pitch deck, you're meeting the need, you're solving a problem for them.

That I think is a key contributor to the homogenous nature of Silicon Valley – “do I immediately like this person? Do we have things in common?” is not the best way to evaluate talent. So our rubric is a really powerful way for us to check ourselves in that way, because there are founders who I get on a call with and I'm immediately all in on, and that's great, because I'm going to dig in and I'm probably going to take the time to actually make the decision. There are some founders who I get on with and I don't have this visceral reaction to their personality, but that shouldn't matter as much - I'm valuing the business, not just their ability to dance. And we've noticed too that some familiarity with venture vernacular and how a person’s body language on camera is, especially in that first Zoom call, especially for folks who may not look and sound like 98% of Silicon Valley, it's really important to ensure that you're looking at everything and not just making a decision based off of that initial reaction.

DAVID STIEPLEMAN: Can we talk about sourcing, by which I mean finding investment opportunities, and you know, a lot of investment firms talk about their differentiated sourcing, what do you do and maybe use an example? One example I'd suggest is Esusu, which is getting a lot of press. It's now a black owned unicorn, it's in the Concrete Rose portfolio, at least on paper and more than just on paper it looks like it's going to be a huge success story, which is great. How did you find that?

SEAN MENDY: Esusu actually came through just our personal network. So, another investor, Keisha Cash, who had a focus on diversity before it was cool and trendy to have a focus on diversity as an investor, it was too early for her. She really liked one of the founders and thought that they should be given an opportunity. And so she introduced us. We met Abbey, one of the co-founders and it actually wasn't a fit when we first met him. But one thing that we do is we meet CEOs, and we'll invest our social capital in them before we actually make a financial capital investment. And, you know ideally, we're helping them get to the point where they become investible for us, so that was the case with Esusu.

We met Abbey and this was one of the founders where you meet him and you are immediately drawn to him. He's got this magnetism about him. That's pretty amazing, but the business looked very different than what it is today. He was focused on helping renters build credit scores, as opposed to thinking about this massive data play that they're now making around providing landlords and property owners with insight into the financial health of their buildings, which is a much better customer acquisition strategy. But there was something about him. As we spent more time with him over many months, six months, we got to know him and the business started to look a little bit more attractive. And then when we did make the commitment, we were able to wrap with our entire ecosystem, which in his words is a key reason why they're able to get to where they're today.

DAVID STIEPLEMAN: You know, the theme of this podcast is supposed to be how people actually do the thing. I want to unpack one of the things that you just described, which is you have these authentic relationships. I'm trying to ask the question on behalf of the young professional in our business. Maybe she's a person of color who has never really been in this space before, any investing space, and she's thinking, okay, I'm supposed to go out there and source? And I just heard Sean say we had authentic relationships.

I feel a little bit embarrassed asking that question, first of all, on someone else's behalf who's hypothetical, but also how do you develop those authentic relationships? Like you're a very nice person. I know you, and I know that people who know you really like talking with you. How do you do that? Maybe it just is what it is and you were born that way. But I suspect that you're developing that in some way. Be immodest for a second.

SEAN MENDY: Man, that is a tough question to answer. I'm genuinely interested in learning from other people, right? So I think going back to the example of how Alan Waxman became somebody we really worked with, and yourself - we worked really closely with you and Alan and the entire Sixth Street team. I think that initial comment that he made about “this is going to fail unless we do this the right way” is what he was saying.

So I think the first thing is asking a lot of questions and not asking them because, oh if I ask questions, people will like me. It's actually asking them because you're interested in what people are talking about. Asking genuine questions, being authentically interested, being humble but also being confident. I think key to building relationships: doing what you say you're going to do, doing it exceptionally well, exceeding expectations and overdelivering. It's not being charming and wowing people in the first meeting. It's actually consistently over time delivering and delivering and delivering and finding ways to add value that lead to authentic relationships.

DAVID STIEPLEMAN: I think that's such a good answer to not just sourcing, but being a business person and a business builder at all, is that people want to spend time with and will commit to people they like and that they trust. And that's not the work of three seconds at a cocktail party where you say something clever or whatever. It’s being consistent and it's delivering on things that you say you're going to do. I think that's a great lesson for people.

SEAN MENDY: There's a small handful of people who can do that. And I admire them. That's definitely not my style. And…

DAVID STIEPLEMAN: You mean sizzle at a cocktail party?

SEAN MENDY: Yeah. There’s far more people who believe they can do that than, than actually can. Me having your phone number and you being on my phone, I don't consider that an authentic relationship. We have to have done something together. We have to have had some type of real interaction and we have to spend some time together. I'm intentional about who I spend time with.

DAVID STIEPLEMAN: Actually, let's talk about that because I think investing businesses, one way to think about them is that they are return on time businesses. Like you have limited amount of time. You have to spend your brain power on things that are going to matter and going to move the needle. How do you do that as a group? How do you enforce that, if that's the right word, as a group, being relentlessly intentional about how you're spending your time?

SEAN MENDY: We need to improve. We need to be great at it. There are definitely those moments where you feel all right, I need to rework my entire calendar and think about how I'm actually spending my time. I still feel like that. Looking back when I reflect and when I actually do the audit of how I spend my time, I feel good about it. But…

DAVID STIEPLEMAN: How often do you do that?

SEAN MENDY: I really do it annually and then I actually set goals for the next year. I literally make a list of who I want to make sure I'm spending time with, who I already spend time with that I want to go deeper with…I do a plan for every family member or person I consider family. And then I actually even have my goals for who I want to meet, and it's usually based off of something I've read or listened to. Quarterly I'm revisiting that.

DAVID STIEPLEMAN: And are you aligning those with your team where they're supposed to overlap? The Concrete Rose team?

SEAN MENDY: My Concrete Rose team sees that plan. They don't usually see it immediately because admittedly, I'm still tinkering with it and it's February 3rd for 2022, and we talk about it as a group. We should actually be more intentional about that. That's a good push to get more explicit about it.

DAVID STIEPLEMAN: So Concrete Rose really got launched in ’19. End of ’19, you had visibility towards the first fund being about 10 million bucks or so, is that right?

SEAN MENDY: That's right. But when I think back, I would actually consider 2018 to be when we founded, because I think 2019 is when we had a first close on the fund and we technically could be investing. But I think similar to how we talked about how you build relationships, the Concrete Rose network, which is just such a powerful driver and is just the engine of what we do, was being built once we explicitly decided we were going to do this in 2018.

Most those folks ended up becoming LPs in the fund and many of them have ended up sending us deals or supporting our founders. So the business was being built in 20… I think I would consider the founding year 2018. I'm going to officially change that. That's a light bulb moment for me right now. Sorry to derail the question.

DAVID STIEPLEMAN: Not at all. I'm glad to contribute to light bulb moments. That's a win in my book. The question is then, you roll into 2020 and I'll make two observations about how Concrete Rose conducted itself.

One was COVID, two was the murder of George Floyd, and both of those - and I don't mean to trivialize either of those things - but both of those presented challenges to Concrete Rose. One was “gee, what are we doing? We're about to start committing capital, what should we do?” and you paused, and maybe you can talk about that.

And then the George Floyd murder sparked a lot of interest, I guess in the quote unquote diversity area of VC and investing generally. And you could have gotten your heads turned by a lot of offers to do something big, different, whatever, and you really conducted yourself in a very deliberate way there and talked to a bunch of people in your network. And my question isn't so much, how did you reach those conclusions, but how do you enforce the discipline to stick with your values and your goals? I mean, it's very early in your life cycle and I don't think that lots of firms would've conducted themselves the way you guys did.

SEAN MENDY: So, I was very, very thankful that we had launched Concrete Rose prior to 2020 and had identified our key partners prior to that. We had relationships that were 10 years strong, in many cases, and we really knew who those people were. The key hack that I had, which was a 10-year hack, was being in Silicon Valley, working on a local problem, providing solutions to black and brown neighborhoods within this broader Silicon Valley community, and finding the folks who cared about those things. So I was very thankful to not be navigating - just meeting a bunch of new people, and having had this lack of opportunity now become this abundance of opportunity, and then making some missteps and trusting folks that you wouldn't trust. So it was easy to remain deliberate and thoughtful in terms of taking on new partners and not just chasing shiny things because we already had something good going.

I think the other thing too was we felt a real responsibility to our earliest backers, to our earliest partners, to do what we said we were going to do. While I think all of them understood that the environment was changing, the context was changing, and we needed to kind of adjust our strategies, we ended up raising two and a half times what we had planned on raising.

So, in terms of COVID, the 60 days, you know...March and April were very interesting months where we weren't sure if we were going to write another check in 2020. Again, because we had these authentic relationships, we knew that we could go to our LPs and say, you know, we're actually going to sit out the rest of the year just to see what actually happens, and we thought that if we gave our rationale reasoning for that, that our LPs wouldn't mind.

We actually sent the message out saying, “hey, we're going to pause,” and only got positive feedback, encouragement and notes of appreciation for how intentional we were being. And then we saw the things that folks feared were going to happen with the economy not really happen, in terms of the space that we're operating within, so we then just adjusted how we were thinking about investing. And were realized that there was going to be this short-term window where COVID, well, it's a longer-term window than we had thought, but COVID is not always going to massively impact every aspect of our lives, but it was going to accelerate some things and change some things. And so, we started to really think about what is going to change and sustain as a result of COVID and that's where we want to be investing. So we started investment themes around that thesis.

DAVID STIEPLEMAN: That's helpful. I'd make two observations about what you just said. One is the environment did change a lot as a result of George Floyd being murdered and the reactive sort of focus on the quote unquote diversity opportunity. That said, the industry, if that's what it is, that focus on founders of color hasn't gotten that much bigger.

SEAN MENDY: No, it has not. And actually, a belief that we have and that also allowed us to stay disciplined is that the thoughtful long-term partners are still going to be here a year later, two years later. So we didn't feel the sense of urgency to just partner with corporations that were immediately launching new initiatives and announcing them. It's pretty amazing. There are more competitors -and again, I'm saying this air quotes – there are more peer funds, far more than when we launched. It's still a drop in the bucket. It's still less than $2 billion managed by funds like ours, and we're very generous with who we consider a fund like ours - if there's any way that we can consider you a fund like ours, we'll do it.

There's an organization that we partner with called Color Wave and their goal is to get more black and brown professionals into the world of startups. We just did this research together and, and I'm sharing with you first, but of the 60 companies that went public last year, creating about a trillion dollar in value, 1.5% of executives were people of color – which is like 10 of like close to 600 executives. That is indicative of the broader industry. It's consistent with every other area, like how many dollars are going to black founders, what the average AUM is of black fund managers. I mean, the change has not happened. My belief is that there will be initiatives that are effective, that pop up, but they have yet to fully take off.

DAVID STIEPLEMAN: I want to talk about the investment strategy a little bit, and if people go to your website, we'll put the website link up so people can check it out. There's kind of like three, I don't know, three themes, three circles. One is founders of color. Two is communities or markets that serve communities of color. And then the third one is interesting, which is, you don't have to be a founder of color, you don't have to be a business that's necessarily in an underserved community, but you have to care about DEI at your organization. Talk about that. How do you know that? How do you validate that? Why is that an important circle, important theme?

SEAN MENDY: This was not part of the initial thesis, but then we realized based off of our competitive advantage, being deeply networked and having access to hard to access opportunities, we needed to be able to find a way to credibly invest in non-underrepresented founders while also staying true to mission. Businesses that are not led by underrepresented founders themselves, leaders who have a demonstrated commitment—that's actually your language, that was one of the first edits you made in a pitch deck that I shared with you— it’s not just a commitment, but a demonstrated commitment to diversity, equity and inclusion. Folks who want to build diverse inclusive companies from day one.

I was playing the long game, because I knew I was going to ask you this question.

Yeah, your lifelong goal being a podcast host.

DAVID STIEPLEMAN: You read me like a book.

SEAN MENDY: So demonstrate commitment to diversity inclusion. One, we believe that that's a way to have the flexibility to influence the most exciting, fastest growing companies being built today. Right? We didn't want to not be able to work with an influence, a founder because they were white. If they had aligned values, we wanted to work with them and we wanted to help them get diversity in those earliest stages.

Two, our mission is mobilizing underrepresented talent. It's not just founders. And if you look at what percentage of professionals are actually founders, it's just such a minuscule percentage compared to all the talent that's out there. How many black and brown and women and LGBTQ professionals have no interest at all in being founders, but are going to be amazing employee number five, employee number 10, and then what happens to those employees? How much wealth is created, how much operational experience do you get that allows you to go off and do other amazing things, either as an investor or an operator yourself, or as a founder yourself in the future?

So we realized that we had to be working in this space. The issue was credibility in making sure that we were underwriting folks and being able to actually evaluate whether or not they had that demonstrated commitment.

How do you do that?

SEAN MENDY: Sorry, that was the question that you asked me . So, one, we actually just explicitly talked to the founder and we actually asked for some type of demonstrated commitment. What is the evidence that we see that shows us that this founder truly incredibly does care about DEI? It can look like an actual business activity. So, we had one founder who his seventh employee hired was a woman who had led DEI initiatives at Facebook, and he hired her to lead his HR function. And he explicitly said, I hired her because I wanted somebody who was thinking about DEI from day one leading my human capital strategy. Very easy to draw a straight line there.

In other cases, it's been, you know, we invested in one founder who wrote his college thesis on the accessibility of AP and IB courses for black students. So, it's not directly tied to his business, but it's something that he'd been thinking about for 10 years prior to starting his company. We had another founder that we didn't invest in, but we checked this box by looking at the work that he had done bringing Obamacare to black communities in the south, when Obamacare was first passed. So, we looked for something that demonstrated commitment.

Second, we looked for coachability, even for folks who'd value DEI. As we are advising you and working with you, we're going to ask you to do some things that might be uncomfortable, or you might feel like, all right, this is going to slow me down a bit. But if you don't get those things right, then you're not going to meet the goals that you're setting for yourselves.

And then we do reference checks. We reference check for inclusive behavior in the past, and we're not looking at one instance of hurting somebody's feelings is not going to disqualify you, but if there's patterns or if there's things that are just totally the opposite of what you've claimed, then that's going to be tough for us to get around. We've fortunately only had positive reference checks for those folks. We have a very high bar for who we will even consider, I mean in that third focus area, because we want to get it right.

DAVID STIEPLEMAN: Wow. Very cool. Can I ask you an off the wall question? Who is your favorite or most important teacher when you were a kid?

SEAN MENDY: My most important teacher was John Pfeiffer, who was my 10th grade English teacher. I was fortunate to go to a high school where there was a Shakespeare seminar as a senior, and he taught that - I took the class because he was teaching it, but it was an amazing experience. It was not cause of anything in the classroom, although I loved his class and had a great relationship with him. The one time I cut class in high school, he happened to see me, and he just looked at me and was like, “what are you doing?” and then walked away. And I was like, I was going to get some food or something, but that stuck with me and I, that was the first and last time.

DAVID STIEPLEMAN: Why did that stick with you? Because he wasn't coming down on you like a ton of bricks, but he's like, that's not you?

SEAN MENDY: He said, you know, he praised me and he gave me great feedback and he criticized the actual like work product and things that all teachers do, but to disappoint somebody like that, Puerto Rican, humble beginnings, like he would talk about how he did not have access to the education that we were getting in that classroom and how much he would've loved it. And I felt guilt that I was like, wasting this opportunity that he would've gotten. I've never actually been asked that question either. So that was a cool question to ask, who is yours?

DAVID STIEPLEMAN: Goldie Ciderman. She taught, European history. She was a wonderful, wonderful teacher.

Building the business, what's been most surprising?

SEAN MENDY: I did not know that for some of the most competitive deals that we’re in - for the deals where there's other great investors involved - I did not realize how you unique what we were offering was and how in demand it would be and how much our founders would be leaning into what we're doing.

When we launched this, my hypothesis (this is 2018, 2019), I suspected that a third of founders would be interested in that third focus area, DEI support. And I also thought that of that 33%, we would have to convince a lot of them that it matters. Not, not that it mattered, but that we could actually be helpful on it. Prior to George Floyd, there was demand for it. Post George Floyd being murdered, we're drinking from a fire hose, and thankfully we actually had the right team in place to actually build new solutions, and in an innovative way to support what we were offering.

But yeah, despite, you know, not writing the biggest checks into some of these rounds, especially in the early days, the amount of engagement of our founders, their willingness to get on another Zoom on a Friday…and every time we schedule them, around our, you know, inclusive culture building, like no one wants to do this on a Friday, they show up, they ask for more. The demand for our partnership has been really surprising.

DAVID STIEPLEMAN: So when you're with the group, formulating your week, you're trying to get through a problem, you're prioritizing whatever the thing is that you are doing as a group, is there a mental framework from your past that you're constantly accessing? You were a soccer player, you were a division one soccer player, right? Is it that? Is it something entirely different? For me, I ran the newspaper in college and I'm always thinking about that, because we always had to get something, we had to put a lot of content in place, decide what it was going to be, edit it and get it out all in the course of like four or five days. And then we did that every week, and we just kept like recycling, and that process and that, energy and that adrenaline rush was like, I loved it and it was fun. And you had to make decisions and couldn't be the enemy of good, I'm always thinking about that. What are, is there something like that for you?

SEAN MENDY: You know, in terms of having been an athlete, I think the idea of team and understanding that you got to get the best out of everybody on the team, definitely you feel that there might be issues or opportunities that we're working through where somebody might not have any experience in that area. But anytime we're bringing something to the full group, we get to better solutions. So, I think that idea of engagement of the full team, like if somebody in the team is not fully engaged or all in, we're not going to get to the best result. There's definitely that.

DAVID STIEPLEMAN: Do you orchestrate those conversations in a particular way? Do you always go first? Do you always go last? Do you make sure you calling people?

SEAN MENDY: We did what we expect our companies to do, where we really define culture and defined, how we do things and have a very aggressive feedback culture. We give frequent feedback, explicit feedback. We don't let things fester. We do a quarterly retreat where we give each other feedback and if somebody's not speaking up in those moments, then they hear it from the rest of the team and people feel valued.

I don't think I have to have any strategy for it because we did things the right way. Now, culture is dynamic and you want to always be intentional about making sure that you're shaping the culture that you want. But right now, we're doing a good job of ensuring that people know that their voices are valued. And so if I'm really excited, then I don't worry about speaking last and I just kind of jump in, but I think we have a good balance.

DAVID STIEPLEMAN: I want to end on this. What is success for Concrete Rose in the next call it three to five years, whether it's metrics or a greater visibility, or what are you pointing yourselves towards? What should we be looking for?

SEAN MENDY: The mission is to build a virtuous cycle of wealth and opportunity for and with underrepresented people of color. Success is us demonstrating that that can be done. It's us demonstrating across the financial sector that our model is going to drive superior returns, and also just demonstrating that you can do business in a better way, a more inclusive way.

We believe in capitalism, it's got to be conscious capitalism and we’ve got to be a little bit more intentional about correcting some of the mistakes, whether they're intentional or not. In many cases, they were intentional that have led to the racial wealth issues that we face. I mean, it's not magic that we got here, right?

No, it's not. I can't thank you enough for your time. I think you're doing it. I think obviously you've achieved liftoff and you can tell based on the investments that you're making, based on the feedback from founders who want to see you in their capital stacks, and just the momentum around the business that it's off to a great start. I can't wait to continue to work with you and I know everybody at Sixth Street feels that way as well. And just congratulations and thanks again for spending the time with us, because I know that it's dear.

SEAN MENDY: Thanks for having me. Yeah, we're on our way to being the multi-billion-dollar fund that we envision being, and our honor to have you as partners and continue to work together.

We feel the same way. Thanks Sean.


Our friend, Sean Mendy joined us for an interview on February 3rd, 2022 from Concrete Rose world headquarters in Menlo Park, California. We appreciate him taking the time to share the story, the wins so far, the lessons and what's in store for Concrete Rose.

Here's what I think we learn from him. One— business building is about relationships and relationships are about trust and transparency. Do what you say you're going to do and consistently over deliver. Two—instincts are great, but you have to test them when evaluating talent or an investment thesis. And three—building a culture of communication is paramount.

If you enjoy today's show, please share it and follow @SixthStreetNews for more on the show and our firm.

Thanks to Sixth Streets’ production team Patrick Clifford and Kate Hannok for putting this together with sound engineering by Steven Cologne and great assistance from Josh Benson at Oldtown Media. Our theme song is Doing It, used with permission from Herby Hancock, Ray Parker Jr., M. Reagan and David Rubin and friends Inc, and Columbia Legacy Records.

Once again, I'm David Stiepleman. Thanks for listening.

The views expressed in this podcast are not necessarily those of Sixth Street and Sixth Street is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of, or listening to this podcast is not to be taken as constituting the giving of investment advice by Sixth Street. Please see additional disclosure of on our website for more details.

AUM presented as of 12/31/2023 and excludes assets and commitments of certain vehicles established by Sixth Street for the purpose of facilitating third party co-invest opportunities. Calculation of assets under management differs from the calculation of regulatory assets under management and may differ from the calculations of other investment managers.